These results from beleaguered coal miner New World Resources (NWR) read like a train wreck. In 2013, mining costs rose by a tenth, production fell by a fifth, coal prices tumbled by nearly a quarter, revenues fell by a third and the company lost money hand over fist. NWR’s underlying operating loss of €166m was then exacerbated by mine impairment charges totalling €807m.
On the bright side, the results reveal cost cutting is starting to have a positive effect. Cash mining costs in the fourth quarter averaged €68 a tonne, down from €77/t a year earlier. That’s still above the price received for NWR's thermal coal - the coal used in power generation - where prices are expected to average €54/t this year. But it leaves an acceptable margin for NWR's coking coal - used in steel manufacturing - where prices are currently around €91 a tonne.
NWR has been trying to shift more of its production toward higher-value coking coal, but in 2013 the coal sales mix was 48 per cent coking and 52 per cent thermal - even worse than the 51:49 split in 2012. The company has nevertheless set a target of 55 to 60 per cent coking coal this year.
NEW WORLD RESOURCES (NWR) | ||||
|---|---|---|---|---|
| ORD PRICE: | 46p | MARKET VALUE: | £122m | |
| TOUCH: | 46-47p | 12-MONTH HIGH: | 305p | LOW: 44p |
| DIVIDEND YIELD: | nil | PE RATIO: | na | |
| NET ASSET VALUE: | * | NET DEBT: | €635m | |
| Year to 31 Dec | Turnover (€bn) | Pre-tax profit (€m) | Earnings per share (¢) | Dividend per share (¢) |
|---|---|---|---|---|
| 2009 | 1.1 | -58 | -26 | nil |
| 2010 | 1.6 | 252 | 86 | 43 |
| 2011 | 1.6 | 187 | 47 | 23 |
| 2012 (restated) | 1.2 | 3 | -4 | 6 |
| 2013 | 0.9 | -1,060 | -344 | nil |
| % change | -28 | - | - | - |
*Negative shareholder equity of €280m £1=€1.22 | ||||
